Apple's $100 Too Cheap; Netflix $100 Too Pricey

A rabid focus on growth has steered investors to Netflix. They should look instead at cash flow—and Apple.

Netflix and Apple both reported crowd-pleasing financial results this week, but the numbers couldn't be more different. Netflix generated impressive growth but a relatively small cash profit. Apple grew more slowly but geysered cash. At the moment, investors are overpaying for growth and underpaying for steady cash generation. As a result, Netflix stock looks $100 overpriced, while Apple stock, $100 too cheap.

Netflix on Monday reported first-quarter earnings of $53 million, up from less than $3 million a year earlier....